I recall reading about the Italy/Germany feud you mention, Harleykwin.

The new Italian president (who is for 6 months the head of the European Union also). The Italian president made a disparaging remark about Germany. And in reaction, German President Gerhard Schroeder was so insulted that he publicly announced cancelling his vacation to an Italian resort in protest.

Apparently many Germans felt similar patriotism and followed suit, so now thousands of Germans have cancelled their vacations to Italy, and the Italian resort industry is really hurting.